BILL NUMBER: AB 636	CHAPTERED  10/10/99

	CHAPTER   718
	FILED WITH SECRETARY OF STATE   OCTOBER 10, 1999
	APPROVED BY GOVERNOR   OCTOBER 6, 1999
	PASSED THE ASSEMBLY   SEPTEMBER 10, 1999
	PASSED THE SENATE   SEPTEMBER 9, 1999
	AMENDED IN SENATE   SEPTEMBER 8, 1999
	AMENDED IN SENATE   JUNE 28, 1999
	AMENDED IN ASSEMBLY   MAY 28, 1999
	AMENDED IN ASSEMBLY   APRIL 5, 1999

INTRODUCED BY   Assembly Members Migden, Corbett, and Thomson

                        FEBRUARY 23, 1999

   An act to amend Sections 17180 and 17199.1 of the Education Code,
relating to school facilities, and declaring the urgency thereof to
take effect immediately.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 636, Migden.  School facilities.
   Existing law, the California School Finance Authority Act,
establishes the California School Finance Authority for the purpose
of assisting school districts and community college districts by
providing financing for working capital and capital improvements.
   Existing law authorizes the authority, pursuant to an agreement
with a participating district, to make secured or unsecured loans to,
or purchase secured or unsecured loans from, a participating
district for any of prescribed purposes.
   This bill would, in addition, authorize the authority to purchase
the rights to and possibilities regarding funding for school
facilities approved by the State Allocation Board pursuant to the
Greene Act of 1998, including amounts apportioned and funded and
amounts approved but not yet funded, and would make conforming
changes.
   The bill would declare that it is to take effect immediately as an
urgency statute.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 17180 of the Education Code is amended to read:

   17180.  The authority is hereby authorized to do all of the
following:
   (a) Adopt bylaws for the regulation of its affairs and the conduct
of its business.
   (b) Adopt an official seal.
   (c) Sue and be sued in its own name.
   (d) Receive and accept gifts, grants, or donations of money for
any of the purposes of this chapter from any of the following:
   (1) A federal agency.
   (2) A state agency.
   (3) A municipality, county, or other political subdivision of the
state.
   (4) An individual, association, or corporation.
   (e) Engage the services of private consultants to render
professional and technical assistance and advice in carrying out the
purposes of this chapter.
   (f) (1) Determine the location and character of any project to be
financed under this chapter, and acquire, construct, enlarge,
remodel, renovate, alter, improve, furnish, equip, own, maintain,
manage, repair, operate, lease as lessee or lessor, or regulate the
same.
   (2) Designate a participating district as its agent, with
authority to enter into contracts, for any of the purposes specified
in paragraph (1).
   (3) Enter into contracts for any of the purposes specified in
paragraph (1).
   (4) Enter into contracts for the management and operation of a
project owned by the authority.
   (g) Acquire, directly or by and through a participating district
as its agent, by purchase solely from funds provided pursuant to this
chapter, or by gift or devise, and sell, by installment or
otherwise, property, rights, rights-of-way, franchises, easements,
and other interests in lands, including, but not limited to, lands
lying under water, and riparian rights, located within the state
which the authority deems necessary or convenient for the
acquisition, construction, financing, or operation of a project.  The
authority may do so upon the terms, and at the prices, it considers
reasonable and upon which it can agree with the owner, and may take
the title to the interest in the name of the authority or in the name
of a participating district as its agent.
   (h) Receive and accept from any source loans, contributions, or
grants for, or in aid of, the construction, financing, or refinancing
of all or part of a project, in the form of money, property, labor,
or other things of value.
   (i) Pursuant to an agreement between the authority and the
participating district, make, directly or through a lending
institution, secured or unsecured loans to, or purchase secured or
unsecured loans from, or purchase all or part of any rights to or
possibilities regarding funding for school facilities approved by the
State Allocation Board pursuant to Chapter 12.5 (commencing with
Section 17070.10) including amounts apportioned and funded and
amounts approved but not yet funded by the State Allocation Board
from, a participating district for any of the following purposes:
   (1) To finance a project or provide working capital.  No loan to
finance a project shall exceed the total cost of the project, as
determined by the participating district and approved by the
authority.
   (2) To refinance indebtedness incurred by the participating
district in connection with projects undertaken, educational
facilities acquired, or working capital financed.
   (j) Upon the terms and conditions the authority deems proper,
lease a project being financed pursuant to this chapter to a
participating district, and  charge and collect rent therefor.  The
authority may terminate a lease pursuant to this subdivision upon the
lessee's failure to comply with any of its obligations under the
lease.  The lease may include any of the following provisions:
   (1) That the lessee shall have the option to renew the term of the
lease for the period or periods, and at the rent, determined by the
authority, or to purchase any or all of the project.
   (2) That upon payment by the participating district of all of the
indebtedness incurred by the authority for the financing of the
project or for the refinancing of the district's outstanding
indebtedness, the authority may convey any or all of the project to
the lessee or lessees, with or without further consideration.
   (k) Charge and equitably apportion among participating districts
its administrative costs and expenses incurred pursuant to this
chapter.
   (l) (1) Obtain, or aid in obtaining, from any state or federal
agency or any private company, any insurance, guarantee, letter, or
line of credit regarding, or of, or for, the payment or repayment of
all or part of the interest, principal, or both, on any loan, lease,
or obligation, or any instrument evidencing or securing the same,
made or entered into pursuant to this chapter, or on any bonds issued
pursuant to this chapter.
   (2) Notwithstanding any other provision of this chapter, enter
into any agreement, contract, or any other instrument regarding any
insurance, guarantee, letter, or line of credit specified in
paragraph (1), and accept payment in the manner and form provided
therein in the event of default by a participating district.
   (3) Assign any insurance, guarantee, letter, or line of credit
specified in paragraph (1) as security for bonds issued by the
authority.
   (m) Enter into any agreements or contracts, including, but not
limited to, agreements for liquidity or credit enhancement, execute
any instruments, and any other act or thing necessary, convenient, or
desirable for the purposes of the authority or to carry out any
express power granted the authority pursuant to this chapter.
   (n) At the discretion of the authority, invest any moneys held in
reserve or in sinking funds, or any moneys not required for immediate
use or disbursement, in obligations authorized by the resolution
authorizing the bonds secured by the investment, or by law governing
the investment of trust funds in the custody of the Treasurer.
  SEC. 2.  Section 17199.1 of the Education Code is amended to read:

   17199.1.  (a) Any participating district, exclusively for the
purpose of securing financing or refinancing of projects or working
capital pursuant to this chapter through the issuance, by the
authority, of revenue bonds, certificates of participation, or other
means, and notwithstanding any other provision of law, may:  (1) sell
to the authority all or part of any rights to or possibilities
regarding funding for school facilities approved by the State
Allocation Board pursuant to Chapter 12.5 (commencing with Sec.
17070.10) including amounts apportioned and funded and amounts
approved but not yet funded by the State Allocation Board; (2) issue
bonds to the authority; or (3) borrow money or purchase or lease
educational facilities from the authority, and in connection
therewith, sell or lease property to the authority, in each case at
any interest rate or rates, rental provisions, with any maturity date
or dates or term, and with any other transfer, assignment, payment,
security, default, remedy, and other terms or provisions as may be
specified in the sale of rights agreement or the bonds of the
participating district or a loan, loan purchase, installment sale,
lease, or other agreement between the authority and the participating
district, subject to the following conditions:
   (A) The sum of the amount borrowed to finance working capital and
the interest payable thereon at the initial interest rate if interest
is variable, shall not exceed 85 percent of the estimated amount of
uncollected taxes, income, revenue, cash receipts, and other district
funds which will be available in any fiscal year for the repayment
of the loan and the interest thereon.  For purposes of this
paragraph, "revenue" includes, but is not limited to, federal and
state funds received by the district.
   (B) In computing the maximum amount which may be borrowed in any
fiscal year pursuant to subparagraph (A), the district may exclude
the amount of any principal or interest which is secured by a pledge
of the amount in any inactive or term deposit of the district which
has a term scheduled to terminate during that fiscal year.
   (C) A participating district that borrows money to finance working
capital pursuant to this subdivision shall be required to repay and
discharge the loan, including interest, within 15 months of the loan
date.
   (D) In enacting this chapter, it is the intent of the Legislature
to provide financing of working capital needed to cover temporary or
cash-flow deficits and  needs for working capital and not long-term
budget deficits or shortfalls in funding.  The participating school
district must demonstrate to the satisfaction of the authority that,
during the term of any working capital loan received pursuant to this
chapter, the participating district will receive or otherwise  have
(without additional borrowing) sufficient funds to repay and
discharge the loan.  The participating district may take into account
all district funds and may base future projections upon historical
experience or reasonable expectations, or a combination thereof.
   (b) Notwithstanding Sections 700, 703, and 1045 of the Civil Code,
the rights and possibilities that a participating district may have
or obtain in the future to unfunded school facility approvals of the
State Allocation Board pursuant to Chapter 12.5 (commencing with Sec.
17070.10), shall constitute property for all purposes and may be
transferred as provided in subdivision (a).  In the case of any
transfer or assignment of rights or possibilities relating to funds
for which bonds have been approved by the voters but are not yet
available, the transfer or assignment shall be approved by resolution
of the State Allocation Board prior to becoming effective.
   (c) Any participating district may enter into any agreement for
liquidity or credit enhancement, with any reimbursement, payment,
interest, security, default, remedy, and other terms it may deem
necessary or appropriate in connection with the issuance of bonds,
the borrowing of money or the lease or purchase of educational
facilities, whichever is applicable.  Any participating district or
districts may also do all things and execute all documents as may be
necessary or desirable in connection with the issuance of
certificates of participation, or other interests, in any bond, loan,
installment sale, lease, or other agreement of the district.
   (d) A school district may by resolution authorize any county or
city board of education or superintendent of schools, and a community
college district may by resolution authorize the Board of Governors
of the California Community Colleges or the Chancellor of the
California Community Colleges, to act as its agent in the performance
of any of the matters permitted by this section or any other
provision of this chapter.  Notwithstanding any other provision of
law, the agent shall have the powers granted by the resolution for
purposes of this chapter.  The resolution shall be deemed to bind the
school district or community college district, as the case may be,
to any contract, agreement, instrument, or other document executed by
the agent on behalf of the school district or community college
district, and all duties, obligations, or responsibilities contained
therein on the part of the school district or community college
district, to the same extent as if duly authorized, executed, and
delivered by the school district or community college district.
   (e) This section shall be deemed to provide a complete,
additional, and alternative method for accomplishing the acts
authorized by this section, and the sale or transfer of any rights to
or possibilities regarding funds for school facilities approved by
the State Allocation Board including amounts apportioned and funded
and amounts approved but not yet funded to, issuance of bonds to,
borrowing of money from, or sale or purchase or lease of educational
facilities from or to, the authority.  Any agreement entered into in
connection with the transfer of any rights to or possibilities
regarding funds for any unfunded school facilities approvals of the
State Allocation Board, including amounts apportioned and funded and
amounts approved but not yet funded by the State Allocation Board or
the issuance of bonds, the borrowing of money or the sale, purchase,
or lease of educational facilities, including, without limitation,
any agreement for liquidity or credit enhancement under this section,
need not comply with the requirements of any other law applicable to
issuance of bonds, borrowing, selling, purchasing, leasing, pledge,
encumbrance, or credit, as the case may be, by a school district or
community college district, or by a county or city board of education
or superintendent of schools or the Board of Governors of the
California Community Colleges or Chancellor of the California
Community Colleges.
  SEC. 3.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect.  The facts constituting the necessity are:
   In order to meet the school facility needs of pupils and school
districts, it is necessary that this act take effect immediately.
